BRIEFING ON THE

ANTI-MONEY
LAUNDERING LAW

What is money laundering?

RA 9160 (Anti-Money Laundering Act of

2001 [AMLA])
Sec. 4: Money laundering is a CRIME
whereby the proceeds of an unlawful
activity as herein defined are
TRANSACTED, thereby making them
appear to have originated from legitimate
sources

Elements of the Crime of

Money Laundering
Unlawful activity
Monetary instrument or property (MI/P)
Transaction/Attempted transaction
Knowledge that the MI/P represents,

involves, or relates to the proceeds of the

unlawful activity

Elements of the Crime of

Money Laundering
UNLAWFUL ACTIVITY [Sec. 3(i) of AMLA]

Kidnapping for ransom

Comprehensive Dangerous Drugs Act of 2002
Anti-Graft and Corrupt Practices Act
Plunder
Robbery and Extortion
Jueteng and Masiao

Elements of the Crime of

Money Laundering

UNLAWFUL ACTIVITY [Sec. 3(i) of AMLA]

Piracy on high seas and Phil. waters

Qualified theft
Swindling under Art. 315 of RPC
Smuggling
Electronic Commerce Act of 2000

Elements of the Crime of

Money Laundering
UNLAWFUL ACTIVITY [Sec. 3(i) of
AMLA]

Hijacking; Destructive Arson and murder,

including those perpetrated by terrorists
against non-combatant persons and other
targets
- International Islamic Relief Organization (IIRO)
- IIRO (Philippines)

Elements of the Crime of

Money Laundering
UNLAWFUL ACTIVITY [Sec. 3(i) of
AMLA]

Securities Regulation Code of 2000

Felonies or offenses of a similar nature that
are punishable under the penal laws of other
countries

Elements of the Crime of

Money Laundering
a. Monetary Instruments [Sec.3(c)
AMLA; Rule 3.c. RIRR]
1.
coins or currency of legal tender of
the
Phils. or any other country
2. drafts, checks and notes
3. securities and negotiable
instruments, bonds, commercial papers
4. deposit certificates, trust certificates

Elements of the Crime of Money

Laundering
5. custodial receipts or deposit substitute
inst.
6. trading orders, transaction tickets
7. confirmation of sale or investments
8. money market instruments,
9. other similar instruments where title
thereto
passes
to
another
by
endorsement,
assignment or delivery
- E-Money defined in BSP Circular No.
649

Elements of the Crime of Money

Laundering
a. Globe G-Cash
b. Smart Cash
c. Bank issued cash and stored value
prepaid cards (e.g. Visa prepaid
card issued by Unionbank)
10. Insurance contracts, and contract of
suretyship

Elements of the Crime of Money

Laundering
b. Property as defined under
the Civil Code
Art. 414. All things which are or may
be the object of appropriation are
considered either:
(1) immovable or real property;
or
(2) movable or personal property.

Elements of the Crime of

Money Laundering
Transaction [Sec. 3 (h) of AMLA]
refers

to any act establishing any right or

obligation or giving rise to any
contractual or legal relationship between
the parties thereto. It also includes any
movement of funds by any means with a
covered institution.

Elements of the Crime of

Money Laundering

Transaction includes:
Cash and check deposits
Over-the-counter
withdrawals
or
check
encashment
opening of deposit accounts
Loan applications/loan payments
Sale of foreclosed properties or acquired assets
Issuance of credit cards, etc.

Elements of the Crime of

Money Laundering
Transaction includes: (Contn)

Trust related transactions

Remittance and receipt of remittance
Foreign currency exchange
Pawning and redemption of pawned property

Elements of the Crime of

Money Laundering
Knowledge (Rule 6.5 of the RIRR)
Knowledge may be established by direct
evidence or inferred from the attendant
circumstances

Why is money laundering a

problem?
Money

laundering
allows
criminals to preserve and enjoy
the proceeds of their crimes,
thus providing them with the
incentives and the means to
continue their illegal activities.

How is money laundering

carried out?/Stages of ML

Placement
Proceeds
placed
institutions

in

financial

Layering
Further distancing proceeds from
their origin

Integration
Funds re-enter legitimate circulation

Stages
1. Placement involves the initial
placement or introduction of the
illegal funds into the financial
system.
Ex. a. Smurfing or structuring
b. Purchase of insurance contract

Stages
2.

Layering involves a series of

financial transactions during which the
dirty money is passed through a series
of procedures, putting layer upon layer
of persons and financial activities into
the laundering process.
Ex. a. electronic transfer of funds
b. disguised transfer of funds as
payment for goods or services

Stage
3. Integrations the money

is once
again
made available to the
criminal with the
occupational and
geographic
origin
obscured
or
concealed. The laundered
funds are
now integrated back into the
legitimate
economy
through
the
purchase
of properties, businesses
and other investments.

Stages

REPUBLIC ACT NO. 9160

otherwise known as
THE ANTI-MONEY
LAUNDERING ACT OF
2001
as amended by
REPUBLIC ACT NO.
9194

FINANCIAL ACTION TASK FORCE

(FATF)
R.A. 9160, otherwise known as the ANTIMONEY LAUNDERING ACT OF 2001
(AMLA), as amended, came into being as
a result of the creation of the FATF.

FATF
Formed in 1989
Based in Paris, France
An

international body formed by G-7 with

a mission of paving the way for the
effective prevention and detection of
money laundering by ensuring that
appropriate measures against money
laundering are implemented in all nations

FATF

In
1990,
FATF
prepared
a
set
of
recommendations
which
provides
a
comprehensive plan of action needed to fight
money laundering. It provides a complete set of
counter-measures against money laundering
covering:
1. Criminal justice system and law
enforcement,
2. Financial system and its regulation, and
3. International cooperation.

FATF
1990 - FATF issued 40 Recommendations
2001 - FATF issued 8 Special Recommendations
which requires countries to have measures in
place to fight financing of
terrorism
(Recommendation VIII Calls for the review of
adequacy of laws and regulations on NPOs)
2004 - FATF Added Recommendation No. 9
(Cash Couriers)

FATF
8 Special Recommendations
Recommendation VII-Countries should review the adequacy
of laws and regulations that relate to entities that can be
abused for the financing of terrorism. Non profit
organizations are particularly vulnerable, and countries
should ensure that they cannot be misused:
(i) by terrorist organizations posing as legitimate
entities;
(ii) to exploit legitimate entities as conduits for
terrorist financing; and
(iii) to conceal the clandestine diversion of funds
intended for legitimate purpose to terrorist organizations.

FATF
To

enforce
compliance
with
the
recommendations,
it
created
and
maintained a list of Non Cooperative
Countries and Territories (NCCT List)

Countries

sanctions.

under the list are subject to

FATF

In June 2000, the FATF placed the Philippines in

its list of Non-Cooperative Countries and
Territories (NCCT) for the following reasons:
1. It has no existing anti-money laundering
law.
2. It has no financial intelligence unit.
3. The Philippines has a very strict bank
deposit secrecy law.
4. Its banks and other covered institutions do
not report suspicious transactions.

AMLA

Effectivity Dates

R.A. No. 9160

2001

- October 17,

R.A. No. 9194 - March 23, 2003

Revised IRRs - September 7, 2003

FATF
With

the enactment of the AMLA and its

amendments by R.A. 9194, the Philippines
was removed from the NCCT List, and no
longer subject to FATF monitoring since,
February 11, 2005.

Covered Institutions
[Sec. 3 (a) AMLA]

1. Banks, non-banks, quasi-banks, trust

entities, and all other institutions and
their
subsidiaries
and
affiliates
supervised or regulated by the Bangko
Sentral ng Pilipinas;
2. Insurance Companies and all other
institutions supervised or regulated by
the Insurance Commission; and

Covered Institutions
[Sec. 3 (a) AMLA]
3. All those supervised or regulated by the
Securities and Exchange Commission
as grantees of secondary license, such
as:
i. securities dealers, brokers, salesmen,
investment houses; and
ii. Mutual funds, closed end investment
companies, common trust funds, preneed companies, investment houses.

AMLAs 3 Major Requirements

for Compliance by Banks and
other Covered Institutions
1. Reporting of covered and suspicious
transactions
2. Customer identification and due
diligence or Know Your Customer
(KYC)
3. Record-keeping

Reporting of Covered and

Suspicious Transactions
[Sec. 8(c)AMLA]

All covered institutions shall report to

the AMLC all covered transactions
and suspicious transactions

Covered Transaction
[Sec. 3(b) AMLA]

Covered
transaction
is
a
transaction in cash
or other
equivalent monetary instrument
involving a total amount in excess
of Five Hundred Thousand
Pesos (Php500,000.00)
within one (1) banking day.

Covered Transaction
[Sec. 3(b) AMLA]

- It is a single transaction in excess of

P500,000.00 within one banking day.
- Therefore, multiple transactions or series
of transactions with an amount not more
than P500,000.00 each, but whose total
amount exceeds the threshold amount,
are
not
reportable
as
Covered
Transaction.

Suspicious transactions
[Sec. 3(b-1) AMLA]

are transactions with covered institutions,

regardless of the amounts involved, where
any of the following circumstances exist:
1. Client is not properly identified;
2. There is no underlying legal or trade
obligation, purpose or economic justification
for the transaction;
3. The amount involved is not commensurate
with the business or financial capacity of the
client;

Suspicious transactions
(cont.):

4. The transaction
structured
in a manner that
[Sec.is3(b-1)
AMLA]
invites suspicion that it is trying to avoid the
reporting requirements under the AMLA;
5. Any circumstance relating to the transaction
which is observed to deviate from the clients past
transactions;
6. The transaction is in any way related to an
unlawful activity under the AMLA; and
7. Any transaction that is similar or analogous to any
of the foregoing.

AMLC Resolution No. 59

Suspicious transaction indicators:

1.

Transactions of individuals or entities that are affiliated

to people suspected of being connected to a terrorist
group or a group that advocates violent overthrow of a
government

2. The NGO does not appear to have expenses normally

related to relief or humanitarian efforts

AMLC Resolution No. 59

(contd)
3. The absence of contributions from donors located within
the country of origin of the NGO
4. A mismatch between the pattern and size of financial
transactions on the one hand and the stated purpose and
activity of the NGO on the other
5. Incongruities between apparent sources and amount of
funds raised or moved by the NGO

Period of Reporting of Covered and

Suspicious Transactions
[Sec. 8(c)AMLA]

Should a transaction be determined to be both

a covered transaction and a suspicious
transaction, the covered institution shall be
required to report the same as a suspicious
transaction

Customer Identification and Due

Diligence/Know your Customer
(CDD/KYC)
1. Establishing and recording the true identity of
clients based on official documents,

2.

Maintaining a system of verifying the true

identity of clients.
- In case of corporate clients, the system must include
a process of verifying their
legal existence,
organizational structure and authority of the person
purporting to act in their behalf.

CDD/KYC

Establishing and recording the

true identity
-Involves:
1. Requiring a client to produce at least one (1) valid
original photo bearing official document of identity (ID)
issued by an official authority.
2. Recording the ID of the client.

CDD/KYC

Establishing and recording the

true identity
What does Official Document of Identity mean?
-Document of identity that is issued by an
authority
What does Official Authority mean?

official

CDD/KYC

Establishing and recording the true

identity
Official Authority refers to any of the following:
1. Government of the Republic of the Philippines;
2. Its political subdivisions and instrumentalities;
3. Government-owned and/or controlled corporations
(GOCCs); and
4. Private entities or institutions registered with or
supervised or regulated either by the BSP or SEC or
IC.

CDD/KYC

Establishing and recording the true

identity

Valid IDs:

Passport
Drivers license
Professional Regulations Commission (PRC) ID

National Bureau of Investigation (NBI) clearance

Police clearance
Postal ID
Voters ID

Barangay certification
Government Service and Insurance System (GSIS) eCard

CDD/KYC

Establishing and recording the true

identity

Valid IDs:
Certification from the National Council for the Welfare
of Disabled Persons (NCWDP)
Department
of Social Welfare and Development
(DSWD) Certification
Company issued by private entities or institutions
registered with or supervised or regulated either
by the BSP, SEC or IC
Integrated Bar of the Philippines ID

CDD/KYC

Establishing and recording the true

identity
Valid IDs:

Social Security System (SSS) card

Senior Citizen Card
Overseas Workers Welfare Administration (OWWA)
ID
OFW ID
Seamans Book
Alien
Certification
of
Registration/Immigrant
Certificate of Registration
Government Office and GOCC ID e.g. Armed Forces
of the Philippines (AFP), Home Development Mutual
Fund (HDMF)

CDD/KYC

Establishing and recording the true

identity
Valid IDs:
Passports issued by foreign governments
For purpose of remittance to students who are not yet of
voting age, photo-bearing school ID duly signed by the
principal of head of the school

CDD/KYC

under the Revised Implementing

Rules & Regulations (RIRR)
Minimum information required:
Name
Present address
Permanent address
Date and place of birth
Nationality
Nature of work and name of employer or nature of selfemployment/business

CDD/KYC

under the RIRR

Minimum Information Required: (cont.)
Contact numbers
TIN, SSS No., GSIS No.
Specimen signature
Source of fund(s), and
Names of beneficiaries in case of insurance contracts
and whenever applicable.

CDD/KYC

under the RIRR

(for juridical persons)

Covered institutions shall endeavor to ensure that a:
1. corporate juridical entity has not been or is not
being dissolved, wound up or voided.
2. its business or operations has not been or is not
being closed, shut down, phased out, or
terminated.
3. Shell companies should be dealt with extreme
caution.

CDD/KYC

under the RIRR

(for juridical persons)

Minimum information/documents:

Articles of Incorporation/Partnership

By-laws
Official address/principal business address
List of directors/partners
List of principal stockholders owning at least 2% of
the capital stock

CDD/KYC

under the RIRR

(for juridical persons)

Minimum information/documents: (cont.)

Contact numbers
Beneficial owners, if any; and
Verification of the authority and identification of the
person purporting to act on behalf of the client.

RECORD-KEEPING
REQUIREMENTS
All covered institutions shall:
maintain and safely store all records of all their
transactions for 5 years from the transaction dates.
anent closed accounts, preserve and safely store the
records on customer
identification, account files
and business correspondence for at least 5 years from
closure dates.
if a money laundering case based on any record kept by
the covered institution has been filed in court, retain said
file until it is confirmed that the case has been finally
resolved or terminated by the court.

Money Laundering
Offenses/Penalties
1. Knowingly transacting or attempting to
transact any monetary instrument or
property which represents, involves or
relates to the proceeds of any unlawful
activity (The money launderer himself)
Penalty
7 to 14 years imprisonment and a fine of not
less than P 3 Million but not more than twice the
value of the monetary instrument or property.

Money Laundering
Offenses / Penalties
2

Knowingly performing or failing to perform an

act in relation to any monetary instrument or
property involving the proceeds of any
unlawful activity as a result of which he
facilitated the offense of money laundering
(The person who assists the money launderer)
(Crim. Case No. 127802, PP vs. Eric Allagadan first money
laundering conviction )

Penalty
4 to 7 years imprisonment and a fine of not less than
P1.5 Million but not more than P3 Million.

Money Laundering
Offenses/Penalties
3. Knowingly failing to disclose and file with
the AMLC any monetary instrument or
property required to be disclosed and
filed
Penalty
6 months to 4 years imprisonment or a
fine of not less than P100,000.00 but not
more than P500,000.00, or both.

Other Offenses under R.A.

9160, as amended
1. For failure to keep records
All records of all transactions of covered
institutions shall be maintained and safely
stored for five (5) years from the dates of
transactions/when they were closed.
Penalty
6 months to 1 year imprisonment or a fine of
not less than P100,000.00 but not more than
P500,000.00, or both.

Other Offenses under R.A.

9160, as amended
2.

For malicious reporting

Any person who reports or files a
completely unwarranted or false information
relative to money laundering transaction
against any person shall be held criminally
liable.

Penalty
6 months to 4 years imprisonment and a fine of
not less than P100,000.00 but not more than
P500,000.00; provided that the offender is not
entitled to the benefits of the Probation Law. (Sec.
14 (c), AMLA)

 No

administrative, criminal or civil

proceedings, shall lie against any
person for having made a covered
or suspicious transaction report in
the regular performance of his
duties in good faith, whether or
not such reporting results in any
criminal prosecution under this Act
or any other law.

Other Offenses under

R.A. 9160, as
amended
Safe Harbor Provision

When reporting covered or suspicious

transactions to the AMLC, covered
institutions and their officers and
employees shall not be deemed to have
violated Republic Act No. 1405, as
amended, Republic Act No. 6426, as
amended, Republic Act No. 8791 and other
similar laws. (Sec. 9, AMLA)

Other offenses under R.A.

9160, as amended
3.For breach of confidentiality
When reporting covered or suspicious
transactions to the AMLC, covered
institutions
and
their
officers
and
employees
are
prohibited
from
communicating directly or indirectly,
in any manner or by any means, to
any person or entity, the media, the fact
that a covered or suspicious transaction
report was made, the contents thereof, or
any other information in relation thereto.

Penalty
3 to 8 years imprisonment and a fine
of not less than P500,000.00 but not
more than P1.0 Million.

Confidentiality Provision of the RIRR

Rule

8.4. Confidentiality Provision-The

members of the AMLC, xxx and all
members of the Secretariat, shall not
reveal , in any manner, any information
known to them by reason of their office.
This provision shall apply even after their
separation from the AMLC. Violation is
punished in accordance with the provision
of the Central Bank Act.

ADMINISTRATIVE OFFENSES
AND SANCTION

Rule 14.1.d of Revised Implementing Rules

and Regulations
Violations of AMLA, rules, issuances, order,
resolutions, regulations
Not less than P100,000.00 but not exceeding
P500,000.00

Prosecution of Money
Laundering Cases

Any person may be charged with and

convicted of both the offense of money
laundering (subject offense) and the
unlawful activity (predicate offense)
Any proceeding relating to the unlawful
activity shall be given precedence over the
prosecution of any offense or violation
under R.A. No. 9160 without prejudice to
the freezing and other legal remedies.

Prosecution of Money
Laundering Cases
Rule 6.6. further provides that All the
elements of every money laundering
offense under Section 4 of the AMLA must
be proved by evidence beyond reasonable
doubt, including the element of knowledge
that the monetary instrument or property
represents, involves or relates to the
proceeds of any unlawful activity.

Prosecution of Money
Laundering Cases
Rule 6.7 clearly states that No element of
the unlawful activity, however, including
the identity of the perpetrators and the
details of the actual commission of the
unlawful activity need be established by
proof beyond reasonable doubt.
The
elements of the offense of money
laundering are separate and distinct from
the elements of the felony or offense
constituting the unlawful activity.

THE ANTI-MONEY
LAUNDERING COUNCIL
OF THE PHILIPPINES
(AMLC)
The Philippines Financial Intelligence
Unit

INSURANCE
COMMISSIONER

BSP
GOVERNOR

SEC
CHAIRMAN

SECRETARIAT
Executive
Director

Legal
Evaluation

Compliance
And
Investigation

Information
Management
And
Analysis

Administrative
And
Financial
Services

AMLC
Acts unanimously in the discharge of their

functions

Secretariat
Members of the Secretariat hold full time

permanent position within the BSP (Sec.

8, AMLA)
Members of the Secretariat are regular
employees of the BSP (Rule 8.2., RIRR)

Functions of the AMLC

(1) to require submission of and
receive covered or suspicious
transaction
reports
from
covered institutions (Sections
7[1] & 9[c].

Functions of the AMLC

(2) to issue orders to the appropriate
Supervising Authority or the covered
institution to determine the true
identity of the owner of any monetary
instrument or property subject of a
CTR or STR or request for assistance
from a foreign state, or believed by
the Council on substantial evidence
to be related to an unlawful activity.
[Sec. 7(2) AMLA]

Functions of the AMLC

(3)
institute
civil
forfeiture
proceedings and all other remedial
proceedings through the Office of
the Solicitor General.
-G.R. No. 170281, R.P. vs. Glasgow
Credit and Collection Services, Inc.,
et al.

Functions of the AMLC

(4) cause the filing of complaints with
the Department of Justice or the
Ombudsman for the prosecution of
money laundering offenses.

Functions of the AMLC

(5) investigate
suspicious
transactions
and
covered
transactions deemed suspicious
after an investigation by AMLC,
money laundering activities, and
other violations of this Act.

AMLC Authority to Inquire

(Sec. 11)

To inquire into or examine any particular

deposits or investments upon order of a
competent court, except in cases where the
unlawful activity involves kidnapping for ransom,
drug-related cases and terrorist related cases.
AMLC Resolution
Court Order
KFR
Drugs-related
Terrorist-related

-G.R.

the rest of the

predicate crimes
under Sec. 3 (i)

No. 174629, RP vs. Hon. Antonio Eugenio, et

al.

Functions of the AMLC

To apply before the Court of
Appeals, ex parte, for the freezing
of any monetary instrument or
property alleged to be the
proceeds of any unlawful activity
as defined in Section 3(i) hereof.
- The freeze order issued is
effective for a period of 20 days
and extendible for a period not
exceeding 6 months.

(6)

Freezing of Monetary
Instrument or Property

The Court of Appeals, upon application ex

parte by the AMLC and after determination
that probable cause exists that any
monetary instrument or property is in any
way related to an unlawful activity as
defined in Section 3(i) hereof, may issue a
freeze order which shall be effective
immediately. The freeze order shall be for
a period of twenty (20) days unless
extended by the court.
G.R. No. 165800, Maj. Gen. Garcia vs. RP,
represented by the AMLC

Extension of the Freeze

Order

Before the 20 day effectivity period of the freeze

order issued by the CA expires, the AMLC may
apply in the same court for an extension not
exceeding a period of six (6) months.

During the effectivity of the freeze order, the AMLC

may avail itself of other legal remedies, such as
inquiry, civil forfeiture and/or the filing of
money laundering case/s.

What can be frozen?

Monetary instrument
Property
Related Web of Accounts Rule 10.4
Related web of accounts - those accounts,
the funds and sources of which originated
from and/or are materially linked to the
monetary instrument(s) or property(ies)
subject of the freeze order.

Duty of Respondent, Covered

Institution or Government
Agency Upon Receipt of Freeze
Order
Immediately desist
from and not allow
any transaction, withdrawal, deposit,
transfer, removal, conversion, other
movement or concealment of the
account representing, involving or
relating to the subject monetary
instrument, property, proceeds or its
related web of accounts.

Functions of the AMLC

(11) to
impose
administrative
sanctions for the violation of laws,
rules, regulations and orders and
resolutions
issued
pursuant
thereto.

Functions of the AMLC

(7) to implement such measures as
may be necessary and justified under
this
Act
to
counteract
money
laundering.
(8)
to receive and take action in
respect of, any request from foreign
states for assistance in their own antimoney
laundering
operations
provided in this Act.

Functions of the AMLC

(9) to develop educational programs
on the pernicious effects of money
laundering, the methods and
techniques
used
in
money
laundering, the viable means of
preventing money laundering and
the effective ways of prosecuting
and punishing offenders.

Functions of the AMLC

(10) to enlist the assistance of any branch,
department,
bureau,
office,
agency
or
instrumentality of the government, including
government-owned and controlled corporations,
in undertaking any and all anti-money laundering
operations, which may include the use of its
personnel, facilities and resources for the more
resolute prevention, detection and investigation
of money laundering offenses and prosecution of
offenders.

HOW TO REQUEST
ASSISTANCE/REFER CASE TO
AMLC?

HOW TO REQUEST
ASSISTANCE/REFER CASE TO AMLC?

AML Desks
email to vaquino@bsp.gov.ph
Call (02) 523-44-21/Fax (02) 524-60-85
Referral Letter (please state case
circumstances/details)
Prevent fishing expedition
Drop by 5
th Flr, EDPC Bldg., BSP Complex, Roxas
Blvd., Malate, Manila

Thank you!
Rommel D. Trijo
Legal Officer III
Legal and Services Group
Anti-Money Laundering Council Secretariat